County Panel To Recommend Buying Software Rights

Members of Northampton County Council's finance committee will recommend the immediate purchase of long-term rights to computer software serving the prison and the civil courts office.

The committee will ask council to dip into the county's contingency fund for the $40,800 that the perpetual license will cost.

That's because neither the county Department of Court Services nor the prison has enough money left in its budget to make the payment this year, and the price will rise by almost $24,000 in September.

Director of Fiscal Affairs Charles L. Houck told the committee yesterday that INSLAW Inc., Washington, D.C., which entered into a five-year, $70,000 lease agreement with the county for the software in August 1984, is willing now to let users buy perpetual rights.

INSLAW will charge new customers $275,000 per system. If the county waits until September to amend the pact and places it in the 1986 budget, "the cost of upgrading the five-year license agreement to a perpetual license will be $64,480," Houck said.

And if the county decides to continue leasing, the cost could soar to $90,000 a system when the agreement is renewed at the end of the five-year period, Houck said.

Houck advised the committee that "INSLAW is having difficulty in running its business. It's now under a Chapter 11 bankruptcy. But I don't foresee any problem. It is a good system, running in many, many counties. It could be bought out by somebody else who would have to honor our contract."

Houck said later that INSLAW filed in February for bankruptcy under Chapter 11, which permits it to continue operating during reorganization, and "it appears they are going to survive. They are going through a transitional phase. They've gotten new contracts and are getting settlements for claims."

The county purchased its first system outright from INSLAW - Promis, used by the criminal courts office, the district justices, the district attorney and the court administrator - about two years ago for $7,500, but "they didn't offer a perpetual license for the other two," Houck said.

"They installed it, and it's doing the job," he went on. "We intended to develop a system of our own for the civil courts, but when we found we could buy it for $35,000, we realized that we couldn't develop it in-house for that."

The county pays an annual maintenance fee of $10,000 for each of the record-keeping systems to keep them up to date.

A letter in June to James P. Sharp, associate regional manager of SCT Resource Management Corp., the county's computer consultants, from INSLAW said the corporation decided to change its pricing because its customers were interested in perpetual leasing arrangements "in view of the difficulty of securing new funding within a five-year period."

In addition, INSLAW said, "the trend in the software industry is to offer only perpetual licenses rather than fixed-term licensing agreements, and we obtained expert counsel from representatives of the computer industry that our pricing was too low considering the need to generate significant revenue to support continued research and development for our products."

Houck said he discussed the proposal with Court Administrator A.V. Marhefka, Deputy Warden Robert Olander and Director of Court Services Maurice Dimmick and they all agreed to the perpetual license agreement.

"The problem is, nobody has money in the budget to pay for it in August," Houck said. "But if we wait until the end of the year, it will cost us $24,000, and that will be a waste of $24,000. It will involve, however, a contingency transfer."

Houck said the county now has $227,469 in its 1985 contingency fund.

Marilyn Bargel, internal audit manager in the office of County Controller Kenneth Florey, reported to the committee that the county has been reimbursed for $15,000 in expensive foods which were charged to the account of Gracedale, the county home, by a former employee.

Committee chairman Dorothy Zug commented, "It sounds like steps have been taken to straighten it out."

Jerry Friedman, director of human services, observed that "$15,000 in shrimp and steak and lobster were a minority of the purchases at Gracedale. Most of the items bought there are hamburger, cottage cheese, muffin mix. We do have a good system at Gracedale, and there was no evidence from the controller's office or from our own findings that we are losing inventory there. This happened as an isolated instance where the receiving was done at the purveyor's place."

Bargel said her office's evaluation of the problem led to "a better understanding of the Gracedale dietary system" and of the way M.W. Wood Co., which manages Gracedale's food program, operates.

Friedman said his office rejected some of the controller's recommendations for change in the system because "as a general thing, industry standards in an operation this big preclude" them.

"We do not have an inventory that is shrinking," he asserted. "We have a lot of controls that tell us what is happening. The bottom line kind of speaks for itself. Are we efficient, productive, do we meet or exceed industry standards? We exceed in an exemplary fashion the dietary programs elsewhere in the area."

Friedman pointed out that Gracedale's sale of congregate meals has brought in $230,000 a year and "costs have gone up less than a tenth of a penny since 1982."

"It sounds like we are doing a fine job at Gracedale," Zug said.

Council member Ladd Siftar commented, "One of the ways to measure our own facility is by other facilities across the state. Other counties are frankly surprised that we have a facility this size that requires such a small amount of tax support. We're obviously doing more with less."